SB2662

The Public Utility Commission’s authority over covered water and sewer utilities now expressly includes tariffs, as does a municipality’s original jurisdiction over covered utility service inside its limits, subject to the chapter’s existing limits. Utilities must include their Texas Commission on Environmental Quality-required drought contingency plans with their filed tariffs. But a drought-plan provision is expressly not a “rate” under the chapter’s definition. This does not put every municipal water system under ordinary PUC rate regulation: “utility” is narrower than “retail public utility,” and existing jurisdictional limits remain. Final law, sections 1–3; Definitions; Previous agency powers; Jurisdiction and limits; Previous tariff filing.

For certified service areas, the law adds noncompliance with a drought contingency plan to the exceptions allowing service discontinuation, reduction or impairment. It adds the same ground for the specified uncertificated providers and utilities or water supply corporations allowed to operate without a certificate. The latter authority remains subject to regulatory rules; existing section 13.250(c) also requires service changes to conform to PUC-prescribed conditions, restrictions and limitations. A customer’s particular notice, dispute or shutoff rights therefore cannot be determined from this bill alone. Final law, section 4; Existing service safeguards; Certificate exceptions.

Required drought contingency plans must contain specific, quantified water-use reduction targets and reasonable procedures for enforcing mandatory restrictions. Listed tools include fines, rate surcharges, service restrictions, service discontinuation and other penalties. The entity preparing the plan establishes its targets and enforcement procedures; the act does not set penalty amounts or require every listed tool in every case. Existing public-input requirements in plan preparation remain. Final law, section 5; Prior plan requirements.

The PUC joins the environmental commission and Texas Water Development Board in jointly setting guideline goals and developing model drought programs. The model programs must now be updated at least once every five years. The joint target goals remain guidelines, expressly not enforceable requirements; that is different from mandatory restrictions in an applicable plan. Final law; Agency definitions; Previous model-program law.

The Senate substitute added the rule that a drought-plan provision is not a rate, required “reasonable” enforcement procedures and changed the introduced text’s “compliance” to “noncompliance” as the service-restriction ground. The latter is the wording that became law. Comparing all five posted versions found no later operative changes; the amendment index lists no amendments. Introduced proposal; Senate substitute; All versions; Amendment index; Final law.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

The law can give suppliers clearer enforcement tools during shortages and customers a more visible filed plan, but customers who violate restrictions may face financial penalties or loss of service. Actual effects depend on the applicable plan, rules and enforcement; this briefing does not verify a particular provider’s current plan or later agency implementation, or claim a measured amount of water savings. Final law.

Both posted fiscal notes estimate a General Revenue cost of $878,172 for fiscal years 2026–27, or $439,086 annually, and three additional full-time-equivalent PUC positions. They anticipate no significant fiscal impact for the environmental commission, Water Development Board or local governments. The bill makes no appropriation itself. These are agency workload estimates, not a promise of unchanged customer bills or no private compliance costs. Introduced fiscal note; Substitute fiscal note.